At SlatorCon Zurich, 80 senior language industry executives gathered on December 5, 2017 to discuss this rapidly evolving industry. The forum featured six 20-minute presentations by some of the leading names in the industry.
Topics ranged from fast changing markets like media localization to neural machine translation (NMT) and vendor centralization to M&A and how language service providers (LSP) need to adapt now or be left behind.
The impact that NMT will have on LSPs is being felt now, not in the near future. “We are past the tipping point; neural machine translation is mainstream now.” Florian Faes, Co-founder and Managing Director of Slator, observed in his opening address.
LSPs and freelance linguists need to retrain and retool now, or they will be edged out by competitors who have adapted and are able to deliver better value for money to buyers.
While NMT does have its limitations and room for improvement, the productivity boost it can provide to human translators will give early integrators a significant speed and pricing advantage.
“Neural Machine Translation is a breakthrough; it is clearly better than the old statistical approach. But it hasn’t made MT a solved problem.” Samuel Läubli, Partner and CTO, TextShuttle shared during his presentation. Samuel is also a PhD candidate in Interactive Machine Translation at the University of Zurich.
Translation Reaches More Users
The demand for language services continues to grow. It will be propelled by the tens of millions of new internet users coming online every month from developing countries like India, the diversity of languages they use, and the battle between global companies to capture them as new consumers.
However, doing business in tens or even hundreds of languages does pose a serious challenge even to the largest and most sophisticated of companies.
“Quality translation reaches more users and is far cheaper than original content development”— Dr. Germán Basterra, Translation Manager, Nestlé Globe
Slator was fortunate to have Dr. Germán Basterra, Translation Manager for Nestlé Globe, explain to us how a large fast moving consumer goods (FMCG) company strategizes their localization activities.
In his experience the issue of centralization and decision-making on usage of technology boils down to quantifying the potential quality improvements and cost reductions. He noted that “quality translation reaches more users and is far cheaper than original content development,” so the business case can be made to choose localization if the argument was properly quantified to potential buyers.
Strategy Mapping Beats Financial Modelling
Steady growth in the language services industry has fueled mergers and acquisitions (M&A) over the past two years. Significant share price gains of listed language service providers, a strong appetite by private equity investors, and a general move towards vendor consolidation in a still highly fragmented market are all driving M&A activity.
“Closing the deal is all about transparency and trust” — Dr. Christoph Bieri, Managing Partner, Kurmann Partners
But contrary to what some believe, the key to creating a win-win in an M&A deal is to find the right qualitative match in culture and business synergy, not the figures used in valuations or financial statements.
“Strategy mapping beats financial modelling to set a good price… (and) closing the deal is all about transparency and trust.” Dr. Christoph Bieri, Managing Partner, Kurmann Partners AG noted in his presentation. Kurmann Partners advised LUZ Inc. in its USD 82.5m sale to RWS in February 2017.
SDL CEO Sees Industry at Turning Point
For SDL’s CEO Adolfo Hernandez, “the old ways of doing things are not going to suffice in the future…we are at a turning point in the industry.”
This, to Hernandez and SDL, means that the old localization workflow models are no longer going to work. Localization will become a continuous activity (i.e. 24/7 availability to clients), in service, process, and delivery.
Continuous improvements to scalability, quality, and productivity will need to be made through leveraging technology.
Localization processes will also need to be integrated into core business systems to create efficiency in execution.
Size is Critical in Media Localization
The growth in media localization is driven by ever larger budgets for original content creation by Over-the-Top (OTT) media players such as Hulu, Netflix, and Amazon.
This growth, however, comes at the expense of local broadcasters, said Björn Lifvergren, CEO and Founder of BTI Studios. Lifvergren explained that local broadcasters have decreased volume output by as much as 30 %to 40% in certain regions as viewing of niche content has moved to OTT services.
“Smaller single-language vendors are left out of RFPs” — Björn Lifvergren, CEO and Founder, BTI Studios
While the shift to OTT is bad news for small media localizers, it is driving strong growth for major players like BTI, which offer the breadth of language expertise and the operational scale required to support the OTT’s content production for a global market and audience.
“More and more content owners are consolidating localization services on a global basis (and) smaller single-language vendors are left out of RFPs,” Lifvergren observed.
I Will Definitely Translate More
Following Lifvergren’s presentation it was time for the speakers panel, where the floor was opened to the audience for Q&A.
Asked if he would translate more volumes if prices dropped thanks to advancing technology, Nestlé’s Dr. Basterra said, “I think I will definitely translate more. I think it’s like if you go to the shop and there’s a 50% discount, you will be twice as much.” Basterra’s comment to some degree validates the positive school of thought in the current debate around the impact of neural machine translation.
It wasn’t all work and no play. After the presentations, attendees settled down to a long evening of drinks, food, and networking with fellow language industry leaders.
Stay tuned in the coming days for deeper coverage of each speaker’s presentation and video interviews.